Haven assets such as gold rise
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U.S. stock futures fell on Wednesday as renewed political turmoil in Washington cast doubt on whether U.S. President Donald Trump can push forward with his pro-growth agenda.
Weakness for equities, seen in Asia (http://www.marketwatch.com/story/asian-markets-mostly-down-as-dollar-continues-to-fall-2017-05-16) and Europe as well, came after The New York Times reported that Trump asked former Federal Bureau of Investigation Director James Comey to stop his investigation (http://www.marketwatch.com/story/trump-asked-comey-to-drop-flynn-investigation-report-2017-05-16) into former National Security Adviser Michael Flynn, citing a memo from Comey. The report prompted some House Republicans to call for a further investigation and for the FBI to hand over documents related to communications between Comey and the president.
Trimming earlier losses, Dow Jones Industrial Average futures were down 84 points, or 0.4%, at 20,851, while S&P 500 futures dropped 11.10 points, or 0.5%, to 2,386. Nasdaq-100 futures lost 18.25 points, or 0.3%, to 5,706.
Perceived haven assets rose, with gold up $6.40, or 0.5%, to $1,242.80 an ounce, and with the Japanese yen rising. The dollar bought Yen112.51, down from Yen113.12 late Tuesday.
The dollar also slumped against other major rivals (http://www.marketwatch.com/story/asian-markets-mostly-down-as-dollar-continues-to-fall-2017-05-16), with the ICE Dollar Index dropping to its lowest level since the day after the U.S. presidential election to hit an intraday low of 97.86.
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"Given that the 'Trump trade' is one of the main reasons the market has been able to break records of late, it is understandable that the scandal engulfing the U.S. government would be of some concern to investors," said Connor Campbell, financial analyst at Spreadex, in a note.
"That's because this crisis will likely prevent Trump from pushing through the very policies -- like his huge infrastructure plans and generous tax cuts -- that fuelled much of the recent rally any time soon, undermining the basis for the current highs," he added.
Tuesday's Comey claim comes just a day after the first reports that Trump had shared classified intelligence (http://www.marketwatch.com/story/trump-revealed-sensitive-intel-to-russians-us-officials-say-2017-05-15) with top Russian officials at a meeting last week. Also last week, Trump fired Comey in a move tied to the former FBI director's investigation into Russian connections in the president's circle.
The probability of a Trump impeachment has gone up after the recent events, analysts noted, with bookmaker Paddy Power's odds reflecting a 33% chance it could happen. An impeachment requires the backing of two-thirds of the Republican-controlled Senate.
Read:Here's why stocks could rally if Trump heads for the exit (http://www.marketwatch.com/story/heres-why-stocks-could-rally-if-trump-heads-for-the-exit-2017-05-12)
(http://www.marketwatch.com/story/heres-why-stocks-could-rally-if-trump-heads-for-the-exit-2017-05-12)The ongoing political uncertainty sent the Dow average and the S&P 500 slightly lower in Tuesday's trade (http://www.marketwatch.com/story/us-stocks-poised-to-cool-their-heels-at-record-highs-2017-05-16). The Nasdaq Composite Index , however, closed at a record for a second session in a row.
Earnings news: Retailer Target Corp.(TGT) is slated to release earnings ahead of the bell, expected to report a slide in earnings and sales (http://www.marketwatch.com/story/target-earnings-prepare-for-nothing-but-awful-analyst-says-2017-05-16).
After the market closes, Cisco Systems Inc.(CSCO) earnings are on deck. Cisco shares have risen 2.5% so far this week, rising alongside other cybersecurity and antivirus shares after the "WannaCry" ransomware attack that hit more than 200,000 computers worldwide.
Read:4 tips to protect yourself from becoming a ransomware victim (http://www.marketwatch.com/story/4-tips-to-protect-yourself-from-becoming-a-ransomware-victim-2017-05-14)
Stock movers: Shares of Advanced Micro Devices Inc. (AMD) lost 3.3% after the chip maker late Tuesday laid out its new growth plans (http://www.marketwatch.com/story/amd-gains-after-laying-out-plans-for-growth-in-servers-2017-05-16).
There were no major economic releases or Federal Reserve speakers on deck on Wednesday.
Oil blues: Oil prices pared back from its recent rally, after the American Petroleum Institute late Tuesday reported a climb of 882,000 barrels in U.S. crude supplies for the week ended May 12. Official supply data from the Energy Information Administration will be released Wednesday morning.
Crude oil lost 0.8% to $48.25 a barrel, while Brent gave up 0.6% to $51.34.
Read:Why Iran poses most 'underappreciated' upside to oil prices (http://www.marketwatch.com/story/why-iran-poses-most-underappreciated-upside-to-oil-prices-2017-05-16)
(END) Dow Jones Newswires
May 17, 2017 04:45 ET (08:45 GMT)